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Taxpayers and their agents have been reminded that CGT UK property returns must be filed before the relevant self-assessment return.
The government introduced the requirement for UK residents to report and pay capital gains tax (CGT) on disposals of UK residential property within 30 days in April 2020 and the deadline was extended to 60 days for all completions on or after 27 October 2021. Non-residents have had an obligation since 2015.
Once a disposal has been reported on a self-assessment (SA) return, it is not possible to submit a CGT on property disposal (CGT PPD) return so it is important to file the CGT PPD return before the SA return, even where the need for a CGT PPD return is only identified when preparing the SA return.
There is only one exception – where the SA return is filed within 60 days of completion of the property transaction, that is before the deadline for the CGT PPD return.
HMRC finally published its guidance on reporting capital gains on UK property in December 2021 and continues to update the manual.
It is necessary to phone the HMRC to request a manual offset for the self-assessment payment offsets, for the 2020/21 financial year, where the CGT liability per the SA return is lower than the CGT reported and paid on the CGT PPD return. Any CGT overpaid is offset against income tax due. However, the fix does not cover the situation where the SA return shows an overall refund. In that situation, it is still necessary to phone HMRC to request a refund of the CGT paid.
Other issues being discussed by the professional bodies and HMRC include: